In October 1973, the members of the Organisation of Arab Petroleum Exporting Countries declared an oil embargo in response to the United States’ support for Israel during the Yom Kippur War. By the end of the embargo in March 1974, the oil price had leapt from US $3 per barrel to nearly $12. The embargo caused an oil crisis worldwide with countless flow-on effects on politics and the economy, especially for a company that dealt in haulage. One of the more troublesome issues that Little Industries faced after the first oil shock shortage of truck tyres. At the time, the company was encountering a lot of tyre trouble from a part of the WMC causeway at Kambalda, surfaced with rough, sharp rocks. In those days, the rubber of choice was either rag (bias) tyres, both cheap and nasty and incredibly susceptible to overheating and blowing out under load, or Michelin steel-belted tyres that stood up to thermal demand on the highway with heavy loads.
But on this job, the rough surface of the causeway was slaughtering the company’s stockpile of Michelins with punctures and fractures. Because of the oil shock and tyre shortage, it was obvious that if the company didn’t do something quickly they’d run out of tyres. Noel got on to Dunlop in Kalgoorlie and found out that they had huge stocks of rag tyres that were falling out of favour with the industry, but not a great deal of Michelins. An idea forming in his mind, Noel bought a large amount of the rags at a better-than-good price and fitted them all on the single truck and trailer. The next week, that rag-tyred truck didn’t suffer a single flat, whereas those other trucks running Michelins were riddled with punctures. He realised that the flexibility in the rag tyres was protecting them against the piercing nature of the jagged rocks, whilst the rigidity of the steel-belted Michelins was making them vulnerable to penetration. Within two weeks, every truck on that route ran on rags, and Noel bought as many as he could from Dunlop for a bargain price. If there hadn’t been an oil shock and the resulting shortage of steel-belted tyres, the company never would have found out that the rags were superior for that job.